We will simplify and explain to you here.
What Is The Difference Between Mortgage Insurance And Life Insurance?
The purpose of mortgage insurance is to cover for your mortgage or housing loan in Singapore while the life insurance is to cover for your life in the event of death, disability or critical illnesses.
Why Are People Confused Between Mortgage Insurance And Life Insurance?
During application, insurance companies will require your mortgage loan from your financial institution because the purpose of the coverage is to cover for your outstanding home loan.
Here its where people are confused.
The mortgage insurance covers for death and disability as well which is similar to the life insurance. The difference is that in the event of death or disability, the sum assured (which is tagged to the remaining mortgage loan) will be paid out to the policy owner. If you are having a mortgage insurance like Home Protection Scheme (HPS) by Central Provident Fund (CPF), upon death or disability, the proceeds from the HPS will pay off the remaining loan. If you are having a private mortgage insurance from private insurers, then the proceeds will still be paid to you. You may find out more about HPS Vs Private Mortgage Insurance.
During application of life insurance, the underwriting is based on your income instead of your mortgage loan. Upon claims, the proceeds from the life insurance will pay to your family members (death benefit) or yourself (disability or critical illnesses benefits) which is different from the mortgage insurance.
Want To Know More About Mortgage Insurance or Life Insurance?
If you would like to know more about mortgage insurance or life insurance, you may contact us at (+65) 9380 2839 or you can click on the button below to enquire about the different financial services that we provide.
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We are a licensed and certified financial planner in Singapore that provides a comprehensive financial planning solutions to meet all your financial and insurance protection needs.
Address: 47 Scotts Road, Goldbell Towers, Singapore 228233
Contact Number: +65 9380 2839
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